M&A Environment in 2012

Lending environment

Those companies expecting lending to loosen significantly in 2012 will be in for another rough year. The well-known advertising campaign for Dunkin Donuts, "America runs on Dunkin," should be more aptly repurposed to "America runs on credit". Credit has and continues to be the lifeblood of the U.S. economy. However, falling commercial real estate values will persist in 2012, driving a continued weakness in banking balance sheets. According to The Society of Industrial and Office Realtors (SIOR), industrial vacancy rates are projected to remain in the 11.7 to 12.3 percent range for 2012. This balance-sheet weakness will prevent many institutions from lending at the volume necessary to truly spur the economy.